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P.M. Kitco Roundup: Gold Ends Firmer, Hits 6-Month High; Uncertain Weekend Looms
Thursday March 13, 2014 1:50 PM
(Kitco News) - Gold prices ended the U.S. day session with slight gains Thursday, but did poke to another six-month high. Profit taking and chart consolidation seen early on gave way to fresh safe-haven buying ahead of a very uncertain weekend on the Ukraine/Russia front. April gold was last up $2.20 at $1,372.70 an ounce. Spot gold was last quoted up $5.70 at $1,373.50. May Comex silver last traded down $0.148 at $21.215 an ounce.
The Russian troop occupation of Ukraine is a growing concern among many traders and investors. U.S. and European Union leaders are threatening to impose economic and diplomatic sanctions on Russia. Meantime, Russia said it will do the same to the U.S. and EU. A referendum from Crimean citizens on secession is scheduled for Sunday, and that could be the next flashpoint in the region. It would not be surprising to see keener risk-aversion in the market place on Friday, heading into an uncertain weekend for Ukraine. It could be that markets will be stressed come Monday morning, if the Ukraine crisis escalates during the weekend. The Russian occupation of Crimea has been a bullish factor for the gold market.
U.S. economic data released Thursday included the weekly jobless claims report, import and export price indexes, manufacturing and trade inventories, and retail sales. The data had only a marginal impact on market prices.
In overnight developments, there was another downbeat economic report coming out of China Thursday. China’s industrial output rose by 8.6%, year-on-year, in the January and February period. That’s lower than the 9.5% rise that was expected and down from a rise of 9.7% in December. While the above numbers are considered by the market place to be a “miss,” most other industrialized nations would love to have economic readings like that. What the market place is noticing is that the rate of economic growth in China is gradually easing. Traders and investors are also a bit concerned about China’s credit and financial system, given the recent bond default by a Chinese corporation—the first one ever. Gold has also seen safe-haven buying due to the uncertainty of the aforementioned matters in China.
The U.S. dollar index fell to a 4.5-month low overnight, which also is an underlying bullish factor for the precious metals.
The London P.M. gold fix is $1,368.75 versus the previous P.M. fixing of $1,366.00.
Technically, April gold futures prices closed nearer the session high Thursday and hit another six-month high. A 2.5-month-old uptrend is in place on the daily bar chart. Bulls have the overall near-term technical advantage. The gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,400.00. Bears' next near-term downside breakout price objective is closing prices below solid technical support at last week’s low of $1,326.60. First resistance is seen at Thursday’s high of $1,375.70 and then at $1,380.00. First support is seen at Thursday’s low of $1,364.90 and then at $1,360.00. Wyckoff’s Market Rating: 7.0
May silver futures prices closed nearer the session low Thursday. The bears still have the slight near-term technical advantage. Prices are in a three-week-old downtrend on the daily bar chart. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at the March high of $21.74 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at this week’s low of $20.61. First resistance is seen at Thursday’s high of $21.48 and then at $21.65. Next support is seen at $21.00 and then at $20.82. Wyckoff's Market Rating: 4.5.
May N.Y. copper closed down 430 points at 291.90 cents Thursday. Prices closed nearer the session low today and closed at a nearly four-year low close. Weak economic data coming from China last weekend has helped to sink the copper market this week. Prices are in an accelerating 10-week-old downtrend on the daily bar chart. Bears have the solid near-term technical advantage. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at this week’s high of 307.75 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at 290.00 cents. First resistance is seen at 295.00 cents and then at today’s high of 297.70 cents. First support is seen at this week’s contract low of 290.80 cents and then at 290.00 cents. Wyckoff's Market Rating: 1.0.
By Jim Wyckoff, contributing to Kitco News; jwyckoff@kitco.com
Follow me on Twitter @jimwyckoff
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